00:00Donald Trump's Big Beautiful Bill gave some restaurant workers a break by not taxing their tips.
00:05One of the world's biggest restaurant chains though says there's a problem with that approach.
00:09In an interview last week, McDonald's CEO Chris Kempchinski said that McDonald's won't see any
00:14benefit from the no tax on tips provision of the Big Beautiful Bill. That's because McDonald's
00:18pays its workers a minimum wage. That can be as low as $7.25 an hour based on the federal minimum
00:24wage. But other restaurants, especially ones that have table service, don't need to pay
00:28nearly as much to their workers. That's because some restaurants use what's called a tipped wage,
00:33meaning they can use some of the tips that customers pay to contribute toward the minimum
00:37wage that they pay their servers. That can mean, for example, that some restaurants pay as little
00:42as just over $2 an hour to servers. Kempchinski said that that's a big advantage for those restaurants.
00:47Instead of paying federal minimum wage, they're able to save money on worker wages. And effectively,
00:53customers are picking up the bill with their tips. While he didn't mention any specific laws or bills
00:57before Congress, Kempchinski said that all restaurants should pay the same minimum wage
01:02to level the playing field. Kempchinski's comments have exposed a rift between McDonald's and the
01:06broader restaurant industry. In a statement after he made his remarks, the National Restaurant Association
01:11said that McDonald's is no longer a member. The association is a trade group representing the
01:16restaurant industry based in Washington, D.C.
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